MEMORANDUM AND ORDER
I. BACKGROUND
Relators Alex Booker and Edmund He-bron bring this qui tam action against Pfizer, Inc., on behalf of the United States, 25 individual states, and the District of Columbia. They allege violations of the federal False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., as well as violations
A. Overview of the Allegations
Booker worked as a sales representative for Pfizer from June 1991 until he was terminated in January 2010. Fifth Am. Compl. ¶¶ 9-10. At the times relevant to this action, he was part of Pfizer’s Neuroscience Division, based in St. Louis, Missouri, in Pfizer’s South Region. Id. ¶ 10. Booker promoted a variety of pharmaceutical drugs, including Geodon (zipraisidone) and Pristiq (devsvenlafaxine), to hospitals and physchiatrists. Id. ¶ 10.
Hebron worked as a sales representative for Pfizer from January 1997 until he was terminated in June 2006. Id. ¶¶ 13, 19. At the times relevant to this action, He-bron also worked in the Neuroscience Division in St. Louis and promoted Geodon to hospitals and psychiatrists. Id. ¶ 18.
The bulk of the Relators’ allegations involve Pfizer’s allegedly fraudulent promotion of Geodon and Pristiq for uses not approved by the Food and Drug Administration (“off-label” uses) and not included in certain federally-recognized drug com-pendia (“non-compendium” uses). Rela-tors allege that as part of the fraudulent scheme, Pfizer made misrepresentations about the side effects of its drugs to physicians, e.g., Fifth Am. Compl. ¶ 71, deliberately mischaracterized clinical studies to physicians, e.g., id. ¶¶ 132-36, concealed negative information about its drugs from both its sales force and physicians, e.g., id. ¶ 68, and paid kickbacks to induce physicians to prescribe Geodon and Pristiq, id. ¶ 114.
Relators allege that Pfizer promoted Geodon for the following unapproved uses: improvement of cognition, Fifth Am. Compl. ¶ 57; reduction of agitation and aggression, id. ¶ 58; improvement of functionality, id. ¶ 59; long-term treatment for bipolar disorder, id. ¶ 60; treatment of bipolar depression, id. ¶ 61 facilitating weight loss for mentally ill patients, id. lowering cholesterol and lipids in the mentally ill, id. ¶ 63; aid in sleeping, id. ¶ 64; treatment of children and adolescents, id. ¶ 66; and use at an excessive dose, id. ¶ 70. Relators allege that Pfizer promoted Pristiq for the following unapproved uses: pain management, Fifth Am. Compl. ¶ 73; prescribing a lOOmg dose, id. ¶ 85; and treatment of vasomotor symptoms associated with menopause, id. ¶ 108.
These uses, Relators argue, are not reimbursable under various federal health care programs, including Medicaid, CHAMPUS/TRICARE, CHAMPVA, the Federal Employees Health Benefit Program, and Part D of the Medicare program. Fifth Am. Compl. ¶¶ 23-34. Claims for reimbursement of prescriptions for those uses, they assert, are thereby false.
Relators also allege that Pfizer made false claims by avoiding its obligations under a 2009 Corporate Integrity Agreement with the government, which was the product of an August 2009 settlement resolving false claims liability stemming from a scheme of off-label Geodon promotion similar to that alleged here. Fifth Am. Compl. ¶¶ 116-127.
Count I thus seeks to hold Pfizer liable under the federal FCA based on its fraudulent conduct which caused or was material to false claims made to federal health care programs, and based on its avoidance of obligations to pay the government under the terms of its Corporate Integrity Agreement.
Counts II through XXVI, respectively seek to hold Pfizer liable under the FCAs of the 25 named states and the District of
Finally, in Count XXVII, Relator Booker alleges that his termination in January 2010 constituted illegal retaliation for his efforts to investigate and stop Pfizer’s FCA violations. See Fifth Am. Compl. ¶¶ 128-44, 274-76.
B. Procedural History
Relators filed this action on July 13, 2010. The complaint was kept under seal while the United States considered whether to intervene, see 31 U.S.C. § 3730(b)(2). In the meantime, Relators filed several amendments to their complaint. When the government declined to intervene on June 21, 2012, the case was unsealed, and Rela-tors’ Fourth Amended Complaint was made public on August 15, 2012. Relators filed the operative Fifth Amended Complaint now before me on October 4, 2012. Pfizer filed a motion to dismiss, arguing that the Fifth Amended Complaint fails to state a claim and, where applicable, fails to plead fraud with the particularity required by Fed.R.Civ.P. 9(b). Relators opposed the motion, but also preemptively moved for leave to amend their complaint as necessary to correct any pleading deficiencies identified by my resolution of the motion to dismiss.
II. STANDARD OF REVIEW
In order to survive a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
I “must accept all well-pleaded facts alleged in the Complaint as true and draw all reasonable inferences in favor of the plaintiff.” Watterson v. Page,
III. THRESHOLD ISSUES
As a threshold matter, Pfizer argues that Relators’ Geodon-related claims are precluded by the “first-to-file” and “public disclosure” provisions of the FCA. I address each argument in turn.
A, First-to-File Bar re Geodon Claims
The False Claims Act provides that “[w]hen a person brings an action under
Relators avoid wading into a comparison of the allegations, which are indeed quite similar, and instead contend that § 3730(b)(5) by its terms bars related actions only when the prior action remains “pending.” The instant action was filed in July 2010, well after both Kruszewski and Westlock were dismissed on December 22, 2009, Kruszewski, No. 07-4106-JCJ, Order (E.D.Pa. Dec. 22, 2009); Westlock, No. 08-11318-DPW, Order (D.Mass. Dec. 22, 2009), pursuant to an August 2009 settlement agreement between Pfizer and the government. Accordingly, relators argue, Kruszewski and Westlock were not “pending actions” that could preclude the filing of this related action.
Court almost uniformly agree that “once a case is no longer pending the first-to-file bar does not stop a relator from filing a related case.” U.S. ex rel. Carter v. Halliburton Co.,
Moreover, I note that even where an earlier relator has voluntarily dismissed his claims — generally, although not exclusively, in cases where the United States has declined to intervene, see 31 U.S.C. § 3730(b)(2), (b)(4), (c) — the relator in the subsequent action still must overcome the FCA’s public disclosure bar, 31 U.S.C. § 3730(e)(4)(A); relators thus still have significant incentive to be the first to the courthouse. Where a prior qui tam action has been resolved on the merits, meanwhile, doctrines of claim and issue preclu
Finally, Pfizer argues that this case is determined by the First Circuit’s approach to the first-to-file bar in Duxbury,
B. Public Disclosure Bar re Geodon Claims
Pfizer also contends that Relators’ Geo-don claims are subject to the FCA’s so-called “public disclosure bar,” which provides:
The court shall dismiss an action or claim ... if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed ... in a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party....
31 U.S.C. § 3730(e)(4)(A)©.
The public disclosure provision does not bar actions, however, when “the person bringing the action is an original source of the information.” Id. § 3730(e)(4). The FCA defines an “original source” as:
an individual who either (i) prior to a public disclosure under subsection (e)(4)(A), has voluntarily disclosed to the Government the information on which allegations or transactions in a claim are based, or (2) [sic] who has knowledge that is independent of and materiallyadds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the Government before filing an action under this section.
Id. § 3730(e)(4)(B).
Pfizer argues that the Kruszewski and Westlock complaints publicly disclosed the same allegations regarding Pfizer’s promotion of Geodon as those alleged in Rela-tors’ Fifth Amended Complaints here, and that relators Booker and Hebron do not qualify as original sources.
There is no dispute that the Kruszewski and Westlock complaints were means of disclosure by which the public disclosure bar could apply. 31 U.S.C. § 3730(e)(4)(A)(i). Relators also do not contest that they allege Pfizer engaged in off-label promotion of Geodon in largely the same manner as alleged in the Krusz-ewski and Westlock complaints. However, they argue that the prior complaints disclosed off-label Geodon promotion only in the years prior to 2008. The “central allegation” of this action, by contrast, is that Pfizer continued to engaged in off-label Geodon promotion even after its August 2009 settlement with the government.
I conclude that the difference in time frame does not necessarily change the fact that the Kruszewski and Westlock complaints disclosed “substantially the same allegations,” 31 U.S.C. § 3730(e)(4)(A)(i), with respect to off-label Geodon promotion (and resulting false claims) as those in the Fifth Amended Complaint. However, by disclosing fraud during an entirely different time frame, the Fifth Amended Complaint does reflect knowledge of the Rela-tors that is “independent of and materially adds” to the prior public disclosures of off-label Geodon promotions. 31 U.S.C. § 3730(e) (4) (B) (2).
1. Framework for Application of Public Disclosure Rule
New courts have addressed the proper application of the FCA’s public disclosure provision to allegations of similar
However, Poteet, on which Pfizer relies heavily, involved “related” fraud in the sense of additional — previously undisclosed — individuals whose false claims were allegedly the result of the same scheme to defraud, involving both the means and general time-frame as had been undertaken by previously disclosed individuals. Poteet,
The government’s awareness of fraud that occurred entirely in the past, by contrast, may not alert the government to future fraud, and thus that awareness “does not bar other potential qui tarn litigants from bringing additional instances of fraud to light.” U.S. ex rel. Hoggett v. Univ. of Phoenix, No. 10-02478-MCE,
When relators allege additional fraud by substantially the same means as previously alleged, subjecting their allegations to the public disclosure bar in all cases would produce untenable results. Engaging in a scheme to defraud cannot immunize a fraudulent action from qui tam suits regarding related forms of fraud in perpetuity; what was once a hot trail of fraud must cool at some point. If, in the distant future, a fraudulent action reached back to revive an old fraudulent scheme, there would be little doubt that the whistleblower who came forward with allegations of the revived fraud would present helpful new information to the government, and the claims surely would not be precluded by the public disclosure bar.
Pfizer’s argument is arguably palatable here because it seeks to apply the public disclosure bar to Relators’ allegations that fraud continued only shortly after the same allegedly fraudulent scheme was
The issue does not appear to arise very often — likely because most persons engaged in fraudulent action, once caught, are not brazen enough to continue their particular form of fraudulent activity, or are creative enough to develop new means of fraud. Pfizer’s proposed system of government-exclusive investigation and enforcement is one conceivable response to the rare case of the unimaginative recidivist. But allowing qui tam suits in the case of old-scheme recidivists who revive their fraudulent activity at least places an additional burden on those contemplating renewed fraudulent activity, rather than sending the message that they can avoid relator-based FCA consequences by “perpetrating a related fraud” and hoping that the government, with its limited investigatory resources, will fail to notice the repeat offense. Hoggett,
The only real question, then, is whether in these circumstances the public disclosure provision is inapplicable on its face, or whether the value added by relators’ allegations brings this action under the “original source” exception. The plain language of the statute favors the latter approach: while the allegations of the Fifth Amended Complaint are “substantially the same” as those previously disclosed, they are nevertheless “independent of and materially add to” the prior disclosures.
I am also guided by the principle that the FCA’s qui tam provisions seek the “golden mean between adequate incentives for whistle-blowing insiders with genuinely valuable information and discouragement of opportunistic plaintiffs who have no significant information to contribute of their own.” U.S. ex rel. Springfield Terminal Ry. Co. v. Quinn,
%. Application
Turning first to the main procedural hurdle, Relators can only maintain this suit if they “voluntarily provided the information to the Government before filing an action.” 31 U.S.C. § 3730(e)(4)(B). The initial complaint in this action contained relators’ primary “independent” and “material” addition to prior disclosures— namely, that Pfizer continued its off-label promotion of Geodon after the August 2009 settlement. Moreover, the initial complaint alleged that “[a]s required by the False Claims Act, 31 U.S.C. § 3730(b)(2), Relators have provided previously to [relevant government officials] a statement of all material evidence and information related to the Complaint.” Compl. ¶ 5 (emphasis added). Relators thus plausibly alleged that, prior to filing the action, they provided the government with the information in their possession on which their allegations are based, including their knowledge that was independent of and materially added to the prior public disclosures.
As to “knowledge that is independent of and materially adds to” prior public disclosures, the Fifth Amended Complaint alleges that relator Booker, in his capacity as a sales representative with Pfizer through January 6, 2010, obtained knowledge that Pfizer had continued or resumed its off-label promotion of Geodon even after the company’s August 2009 settlement with the government. As discussed above, this information is sufficient to qualify for the “original source” exception.
Relator Hebron, by contrast, has not been employed with Pfizer since June 2006. The only allegations regarding his involvement with or investigation of Geo-don promotion are limited to the time of his employment, and in particular the period from 2002 to 2005. Fifth Am. Compl. ¶ 69. Nevertheless, this does not seem to pose any bar to Hebron acting as a relator in the Geodon claims. While the pre-amendment version of the public disclosure provision required that an “original source” have “direct and independent knowledge of the information on which” his allegations were based, see 31 U.S.C. § 3730(e)(4)(B) (1994), the amended statute requires only that a relator have “knowledge” that is “independent of and materially adds to” prior public disclosures. Id. § 3730(e)(4)(B) (2010). Thus Hebron can act as a relator if he, like Booker, has knowledge of Pfizer’s post-settlement Geodon promotion practices. His participation in this action, and the allegation that he previously provided relevant information to the government, Compl. ¶ 5, indicate that he does. That Hebron obtained his knowledge indirectly—indeed, presumably through relator Booker—poses no obstacle to the applicability of the “original source” exception. Although in most cases a relator with the bulk (if not the entirety) of the relevant knowledge may be less willing to share his potential bounty, 31 U.S.C. § 3730(d)(1), the statute does not preclude such generosity.
Relators’ complaint is subject to the public disclosure provision because it includes “substantially the same allegations” as those contained in the Westlock and Kruszewski complaints. However, Rela-tors plausibly allege that they have “knowledge that is independent of and materially adds to the publicly disclosed allegations” of those prior complaints-specifically, knowledge regarding Pfizer’s continued fraudulent promotion of Geodon for unapproved uses after its August 2009 settlement with the government, which caused or was material to false claims. 31 U.S.C. § 3780(e)(4)(B). They also indicated at the outset of this litigation that, prior to filing this action, they voluntarily provided the government with the information on which their allegations are based. Id. Relators thus plausibly allege that they qualify for the “original source” exception, and the public disclosure provision does not provide grounds to dismiss the action.
Having addressed the preliminary hurdles posed by the FCA’s first-to-file and public disclosure provisions and concluding Relators plausibly allege they can surmount them, I turn to Relators’ substantive allegations.
IV. FALSE CLAIMS ALLEGATIONS
The FCA imposes liability on any person who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval,” 31 U.S.C. § 3729(a)(1)(A), or “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim,” id. § 3729(a)(1)(B). The FCA also prohibits “reverse” false claims, imposing liability on any person who “knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” Id. § 3729(a)(1)(G). Conspiracy to commit violations of the foregoing provisions constitutes a separate FCA violation. Id. § 3729(a)(1)(C).
As to the theories on which I have found Relators have stated a claim, I go on to determine whether Relators have alleged fraud with sufficient particularity to satisfy Fed.R.Civ.P. 9(b).
A. “Reverse”False Claims
Relators allege that Pfizer made “reverse” false claims in violation of 31 U.S.C. § 3729(a)(1)(G), by failing to comply with a Corporate Integrity Agreement (CIA) it had with the Office of Inspector General (OIG) of the Department of Health and Human Services (DHHS).
The CIA requires Pfizer, after reasonable opportunity for review, to report to OIG certain qualifying “reportable events,” including violations of law applicable to federal health care programs or violation of FDA requirements relating to the promotion of government-reimbursed products. Booker alleges that a January 5, 2010 email he sent to Pfizer Corporate Compliance objecting to off-label Geodon promotions constituted a reportable event. Fifth Am. Compl. ¶¶ 120-121. Relators allege that Pfizer’s behavior constituted avoidance of its obligation to pay the CIA’s “Stipulated Penalties” of $2,500 per day for failure to report a qualifying event.
The agreement, however, also provides that Pfizer’s failure to comply “may lead to the imposition” of the Stipulated Penalties if the OIG “determin[es] that Stipulated Penalties are appropriate.” The mere fact that Pfizer’s failure to report “might result in a fine or penalty is insufficient” to establish an “obligation” to pay the government under § 3729(a)(1)(G). U.S. ex rel. Bahrani v. Conagra, Inc.,
Bahrani,
Other cases cited by relators are largely inapposite because they involved clear obligations to pay money or transmit property to the government that defendants sought to avoid. U.S. ex rel. Matheny v. Medco Health Solutions, Inc.,
Because the CIA did not impose on Pfizer an “obligation” to pay the government, relators fail to state a claim for “reverse” false claims in violation of § 3729(a)(1)(G).
B. False Claims
Turning to Relators’ claims under §§ 3729(a)(1)(A) and (B), Pfizer argues that Relators’ claims fail to allege “false or fraudulent” claims for which Pfizer can be held liable. “[A]n actual false claim is the sine qua non of a False Claims Act violation.” U.S. ex rel. Karvelas v. Melrose-Wakefield Hosp.,
I discuss below the four ways in which Relators seek to allege the falsity of claims for reimbursement of off-label Geodon and Pristiq prescriptions. I then discuss issues unique to alleging the falsity of claims for reimbursement of Pristiq prescriptions.
1. Falsity Based Solely on Claims for Reimbursement of Off-Label Nom-Compendium Uses
Relators first seek to establish the falsity of any claims for reimbursement of
Pfizer argues Medicaid programs (as administered by the States) and Medicare Part D Prescription Drug plans (as administered by private contractors) retain discretion to reimburse for off-label non-compendium uses of a pharmaceutical drug. Cf. U.S. ex rel. Franklin v. Parke-Davis, Div. of Warner-Lambert Co., No. 96-11651-PBS,
a. Federal FCA
Perhaps counter-intuitively, Pfizer’s argument as to federal reimbursement policy does not affect whether Relators have stated a claim under the federal FCA (Count I). Relators’ task of alleging a false claim is surely easier if I find that federal law prohibits reimbursement for off-label non-compendium uses in all instances. In that circumstance, a claim for such reimbursement is false for purposes of federal law regardless of the state practice. Any “ambiguity in a condition of payment,” created by federal or state law does not mean the claim is not false, but would be “relevant only to the claimant’s knowledge of falsity.” U.S. ex rel. Fox Rx, Inc. v. Omnicare, Inc., No. 11-00962-WSD,
Relators have argued, however, and Pfizer does not dispute, that at least some states refuse reimbursement for off-label noncompendium uses. Cf. U.S. ex rel. Franklin v. Parke-Davis, Div. of Warner-Lambert Co., No. 96-11651-PBS,
b. State FCAs
The analysis is somewhat different for purposes of alleging false claims under the state FCAs (Counts II through XXVI). While a claim for reimbursement may be false for purposes of federal law regardless of state practice, at the state level I recognize the full force of Pfizer’s argument that “if a state Medicaid program chooses to reimburse a claim for a drug prescribed for off-label [non-compendium] use, then that claim is not ‘false or fraudulent,’ and liability cannot therefore attach for reimbursement.” U.S. ex rel. Banigan v. Organon USA Inc.,
Accordingly, plausibly alleging the falsity of claims under state FCAs will turn in part on whether the state programs permit off-label non-compendium reimbursements, regardless of federal reimbursement policy. Adequate allegations of false claims based solely on the filing of off-label non-compendium claims is thus a state-by-state affair. In the Fifth Amended Complaint, however, Relators have merely relied on the alleged federal reimbursement practice, see Fifth Am. Compl. ¶¶ 28-34, without acknowledging the effect that state reimbursement practices might have under state FCA claims. Thus, in Counts II through XXVI, Relators cannot adequately plead the falsity of claims solely by alleging off-label non-compendium reimbursement claims and only the alleged federal policy of refusing reimbursement for those claims.
2. Falsity Based on Kickbacks
Relators also seek to establish the falsity of claims where those claims flowed from alleged kickbacks Pfizer paid to physicians as inducement to prescribe Geodon and Pristiq. Claims induced by kickbacks may be false when they “misrepresent ] compliance with a material precondition of payment forbidding the alleged kickbacks.” New York v. Amgen Inc.,
Instead, Pfizer argues that Relators have not stated a claim for violation of the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, that could form the basis for falseness of eventual claims. According to Pfizer, Relators needed to allege that its payments to any physician speakers exceeded their fair market value in order to establish that those payments constituted
But while Pfizer’s payment for services at more-than-market value might be helpful evidence of a kickback scheme, I am not convinced it is necessary to establishing a kickback in all cases. 42 U.S.C. § 1320a-7a(i)(6)(G) and (H), for example, exclude certain non-market value offers from the category of illegal kickbacks under particular circumstances, but neither provision requires an exchange at non-market value to constitute an illegal kickback. Even without such an allegation here, Relators have plausibly alleged that Pfizer was knowingly paying physicians to induce them to prescribe Geodon and Pris-tiq. I reserve for Part IV.D.2, infra, discussion of whether relators have pled the kickback scheme and resulting claims with adequate particularity for purposes of Rule 9(b).
8. Falsity Based on Fraud in Promotion
Relators next rely on allegations of fraudulent conduct by Pfizer in promoting its drugs to establish the falsity of claims. For example, Relators allege that Pfizer managers encouraged sales representatives to exclude from their promotional activities negative material about its drugs, Fifth Am. Compl. ¶ 57(d), and to conceal unfavorable FDA decisions regarding those drugs, id. ¶ 66(f). Relators also allege that sales managers were trained to provide information regarding drug side effects that had no clinical support. Id. ¶ 71(b). Relators argue that claims induced by such fraudulent activity are themselves inherently “false or fraudulent.”
While underlying fraudulent conduct, however, may constitute “false statement[s]” for purposes of § 3729(a)(1)(B), such conduct does not in and of itself establish the “false or fraudulent claim” required for liability under both §§ 3729(a)(1)(A) and (B). Consistent with the principle that the FCA “does not create a cause of action against all fraudulent conduct affecting the government” U.S. ex rel. Rost v. Pfizer, Inc.,
These precedents do not necessarily rule out the possibility of underlying fraudulent conduct so extreme as to allow the inference that resulting claims are also false. E.g., U.S. ex rel. Ruhe v. Masimo Corp.,
k- Falsity Based on Misbranding Alone
Relators’ last effort to establish the falseness of claims is to argue that, just as claims induced by kickbacks may be false, so too may claims induced by misbranding alone — i.e., misbranding without the additional element of fraud, discussed in the preceding section. It is clear that “FCA liability does not attach to violations of federal law or regulations, such as marketing of drugs in violation of the FDCA, that are independent of any false claim.” Rost,
This theory of falsity, however, is one that Relators have failed to plead. Nothing in their complaint even remotely alleges that any of the federal or state programs at issue make compliance with marketing regulations or criminal mis-branding laws a precondition to payment. Even in their response to Pfizer’s motion to dismiss, Relators’ response to the possibility of reimbursement for claims induced by fraud is, effectively, “it simply cannot be.” As the First Circuit made clear in Amgen, however, the inquiry into misrepresentations of preconditions to payment is “fact-intensive and context-specific.”
Relators say they have adequately “alleged that the federal Medicaid statute prohibits state Medicaid programs from reimbursing for off-label uses of Geodon and Pristiq promoted by Pfizer.” True enough. But this was the argument for falsity discussed in Part IV.B.l above— namely, that claims for reimbursement of all off-label uses are false because the federal statute precludes reimbursement for those uses. Relators cannot transform such an allegation into the separate allegation that the claims induced by Pfizer are false because the relevant federal and state programs make compliance with mis-branding laws or marketing regulations a precondition to payment.
5. Falsity of Pristiq Claims
Pfizer points out that the Pristiq FDA-approved label indicates it is available in “50 and lOOmg tablets” and permits use of a lOOmg dose for certain purposes. The federally-recognized DRUGDEX compendium, see 42 U.S.C. § 1396r-8(g)(l)(B)(iii), also indicates Pristiq at lOOmg for treating menopausal hot flushes. Accordingly, allegations regarding Pfizer’s promotion of a lOOmg dose or menopause-related uses alone cannot support the falsity of resulting claims for those uses.
In Part IV.D.l, infra, I conclude in any event that Relators have failed to plead their Pristiq allegations with sufficient particularity. For present purposes, I observe that allegations of claims for reimbursement of Pristiq at a lOOmg dose or for menopause-related reasons are in themselves insufficient to allege the falseness of those claims.
Under the federal FCA (Count I), Rela-tors have plausibly alleged that Pfizer induced claims which were false solely by seeking reimbursement for off-label non-compendium uses. Those allegations alone are insufficient, however, to allege the falseness of claims for purposes of the state FCAs (Counts II through XXVI).
Relators have also alleged a plausible kickback scheme that may be the basis of falseness for claims for reimbursement of Geodon and Pristiq prescriptions induced by those kickbacks. I am prepared, subject to a Rule 9(b) analysis, see Section IV(D) infra, to allow Relators to proceed on this theory as to Counts I through XXVI, although I have indicated that, upon a properly-raised challenge, the lack of state-specific pleading may jeopardize those allegations.
By contrast, Relators have not plausibly alleged that any claims for reimbursement of Geodon or Pristiq prescriptions were false solely by virtue of underlying fraudulent conduct by Pfizer. Relators have also failed to allege that any state or federal program at issue makes compliance with misbranding laws or other marketing regulations a precondition to payment, and thus have not plausibly alleged that any claims induced by misbranding were false as a result.
C. Pleading Fraud with Particularity
As to Relators’ remaining viable theories of liability, I turn to whether they have alleged fraud with sufficient particularity.
FCA allegations and their state counterparts are subject to the heightened pleading standards of Fed. R.Civ.P. 9(b). Duxbury,
The First Circuit has also recognized a “distinction between a qui tarn action alleging that the defendant made false claims to the government, and a qui tarn action in which the defendant induced third parties to file false claims with the government.” Duxbury,
1. False Claims for Reimbursement of Off-Label Nom-Compendium Uses
I begin with the most particular allegations, which relate to Geodon. The Fifth Amended complaint effectively has one paragraph that specifically pleads the filing of claims for reimbursement of prescriptions for off-label non-compendium Geodon uses. See Fifth Am. Compl. ¶ 69. Each claim alleged therein was submitted to Illinois Medicaid for reimbursement of off-label Geodon prescriptions to children and at allegedly off-label doses. Id. Several of the claims were made in 2011 — postdating the August 2009 settlement — and the prescribing doctors had been the objects of Pfizer’s Geodon promotion dating back to 2002. Id.
From there, the allegations as to Geodon promotion and resulting claims (or even prescriptions) fall off in particularity. Particular allegations as to off-label promotion of Geodon for cognition, for example, are limited to promotion to doctors with Medicare/Medicaid populations that were “large,” which Relators later characterize in the context of another doctor as “40%.” Fifth Am. Compl. ¶¶ 67(c)-(d). The same is true as to allegations regarding promotion of Geodon for anger management, except the doctor allegedly targeted in the particular instance alleged had only a “25%” Medicare/Medicaid practice, which Relators nevertheless also characterized as “large.” Fifth Am. Compl. ¶ 58(d).
Meanwhile, the only particular allegation regarding promotion of Geodon for improving sleep is actually an instance in which a doctor asked Booker about use of Geodon for improving sleep, and Booker told the doctor Geodon is not indicated for that purpose. Fifth Am. Compl. ¶ 129. There are no allegations as to prescriptions let alone claims for reimbursement of these off-label uses. And there are essentially no particularized allegations in the Fifth Amended Complaint with respect to the remaining alleged off-label Geodon uses alleged.
The allegations as to Pristiq are similarly thin. The strongest allegation is that Booker promoted the lOOmg dose of Pris-tiq to psychiatrists in Missouri known to prescribe Pristiq off-label and who had “large” Medicaid patient populations. Fifth Am. Compl. ¶ 101. Relators allege Pfizer’s promotion of the lOOmg Pristiq dose to Illinois doctors with “nearly a total Medicare patient population,” but include no allegation as to their prescribing habits. Fifth Am. Compl. ¶ 94. Relators allege promotion of the lOOmg dose to another Illinois doctor who was “pumping it out,” but allege only that he “has Medicare patients.” Id. Relators also allege that they obtained through investigation information about Pfizer promoting Pristiq for pain management to doctors in Missouri, Indiana, Kentucky, Ohio, and Tennessee. Fifth Am. Compl. ¶ 75. They allege that Pfizer had information about the prescription history and Medicare/Medicaid billing of those doctors, but this says next to nothing about their habits of prescribing off-label uses to federally-insured patients or claiming reimbursement from government programs for off-label Pristiq uses.
The complaint in many ways tests the limits of the “more flexible standard” applied to allegations that a defendant induced third parties to file false claims. Duxbury,
To be sure, in some circumstances rela-tors will not need particularized allegations of false claims resulting from every promoted off-label use alleged in their complaint; rather, “representative examples for multiple alleged off-label uses” may be sufficient. See U.S. ex rel. King v. Solvay S.A.,
Here, even the particularized allegations do not “allege[ ] the submission of
The allegations as to Pristiq are also wholly inadequate and also cannot benefit from the limited particularized allegations of claims for reimbursement of prescriptions for off-label Geodon use. It may be impractical and impose too great a burden to require particularized allegations regarding claims for reimbursement for every single off label use of a particular drug where there have been sufficiently strong allegations as to claims for reimbursement of some subset of off-label uses. But allegations regarding an entirely different drug implicate a largely different cohort of doctors, weighing a new set of considerations for prescription and reimbursement. To conclude that the woefully inadequate allegations as to Pristiq here are somehow saved by limited particularized allegations as to Geodon would not constitute a “more flexible” approach to Rule 9(b), but rather would deprive that approach of any real meaning.
As to the Geodon allegations that do survive, however, Relators have adequately pled that those claims extend over a wide geographic scope. Almost all of the allegations described above implicate a Pfizer district or regional sales manager in the promotional activity alleged to have induced false claims. Moreover, one notable strength of the complaint is in its allegations that Pfizer’s drug-promotion strategy was coordinated at a national level. See, e.g., Fifth Am. Compl. ¶¶ 57(b), 58(b), 59(b)-(d), 60(b)-(d), 61(b)-(d), 69(c), ffi, 70(b).
2. Kickback Scheme
As discussed in Part IV.B.2, supra, Re-lators have alleged a plausible kickback scheme by which to establish the falseness of claims induced by that scheme. The question now is whether they have alleged that scheme and resulting claims with sufficient particularity. I conclude that they have.
The Fifth Amended Complaint contains a fair amount of detail regarding Pfizer’s promotional speaker program. The name is self-explanatory: Pfizer paid physicians to speak at events promotion Pfizer products. Relators allege the rapid expansion of Pfizer’s promotional speaker program after 2009. Fifth Am. Compl. ¶ 114(a). They provide a fairly specific range of amounts that speakers were paid: between $1000 and $1750 at an annual cap of $50,000. Fifth Am. Compl. ¶ 114(e). They note that physicians might have made $1000 for as little as 45 minutes at a promotional event. Fifth Am. Compl. ¶ 114(i). Importantly, Relators also allege that Pfizer District Manager Stephanie Bartels, along with other District Managers, encouraged sales representatives “to select those physicians who had the high
Relators have thus alleged with particularity sufficient to satisfy Rule 9(b) that Pfizer was knowingly paying physicians to induce them to prescribe Geodon and Pris-tiq, that physicians did so prescribe, and that the resulting claims were false.
3. Knowingly Caused
Pfizer also argues that Relators have failed to plead with particularity that it “knowingly caused” the filing of any false claims.
L Summary
Relators have thus pled with adequate particularity their allegations of false claims stemming from fraudulent promotion of Geodon for children and adolescents, for bipolar maintenance, and at excessive dosage, and their allegations of false claims induced by kickbacks.
V. RETALIATION
Booker’s retaliation claim under 31 U.S.C. § 3730(h) (Count XXVII) presents a largely independent set of issues. To state a claim, Booker must plead that his conduct was protected under the FCA, that Pfizer knew he was engaged in such conduct, and that Pfizer discharged or discriminated against him because of his protected conduct. Karvelas,
A. Relevant Allegations
Booker worked as a sales representative at Pfizer from 1991 until he was terminated on January 6, 2010. He was a consistently high-performing sales representa
Over the course of 2009, Booker objected to a wide variety of Pfizer’s off-label promotional activities and distortions of clinical research, primarily to his district manager John Tidwell. Fifth Am. Compl. ¶¶ 128-139, 141-42. On October 2009, he called the Pfizer Compliance Hotline to report that his district manager was “using false representations to sell Geodon off-label.” Fifth Am. Compl. ¶ 140. On January 5, 2010, Booker sent an email to Pfizer Corporate Compliance “objecting] to the off-label Geodon sales practices” promoted by district manager Tidwell. Fifth Am. Compl. ¶ 143.
B. Analysis
The First Circuit construes the concept of protected activity under the FCA broadly to include “investigating matters which are calculated, or reasonably could lead, to a viable FCA action.” Karvelas,
As has been discussed at length above, off-label promotion in and of itself is not the subject of FCA liability. In this respect, Booker’s conduct thus might be viewed as more akin to mere reporting of regulatory failures, divorced from any false claims.
However, this case is “in a different category than in Karvelas,” U.S. ex rel. Rost v. Pfizer, Inc.,
Once Booker’s protected activity is established, there is little question that he has stated a plausible claim. Pfizer’s awareness of his activity is more than plausible based on the allegation that Booker reported his concerns to Pfizer Corporate Compliance. And the proximity between his protected activity and abrupt termination after years of excellent job performance are sufficient at this stage to allege that he was discharged because of his protected conduct. Cf. U.S. ex rel. Bierman v. Orthofix Int’l, N.V.,
VI. CONCLUSION
For the reasons set forth more fully above, defendant’s motion to dismiss, Dkt. No. 44, is GRANTED IN PART and DENIED IN PART. Relators may continue to pursue Count I insofar as FCA liability is premised on off-label promotion of Geo-don for children and adolescents, for bipolar maintenance and at excessive dosage, or premised on claims induced by kick
Notes
. I have already denied Relators’ motion for leave to file a Sixth Amended Complaint, and will test Pfizer’s motion to dismiss against the allegations as they are presented in the Fifth Amended Complaint. See Dkt. # 65.
. Pfizer’s motion to dismiss under this provision, which is technically "jurisdictional,” is brought under Fed.R.Civ.P. 12(b)(1). Review under Rule 12(b)(1) is "similar to that accorded a dismissal for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6),” and any distinctions make no difference here. Murphy v. United States,
. I apply the provisions of § 3730(e)(4) as amended by the Patient Protection and Affordable Care Act ("PPACA”), Pub.L. 111-148, Title X, § 10104(j)(2), which became effective on March 23, 2010. Pfizer cites Graham Cnty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson,
That said, several of the state false claims statutes retain a definition of an "original source” analogous to the FCA’s pre-amendment version, which defined original source as "an individual who has direct and independent knowledge of the information on which the allegations are based,” 31 U.S.C. § 3730(e)(4)(B) (1994). See, e.g., Col.Rev. Stat. Ann. § 25.5-4-306(5)(c)(II); Del.Code Ann. tit. 6, § 1206(c); Ind.Code Ann. § 5 — 11— 5.5 — 7(f). Other states have amended their statutes to match the FCA's amended provision, but those provisions were not yet in effect when this action was filed. Compare Fla. Stat. Ann. § 68.087(3) (2003), with 2013 Fla. Sess. Law Serv. Ch. 2013-104 (C.S.C.S.H.B. 935) (eff. July 1, 2013). See also, e.g., Conn. Gen.Stat. Ann. § 17b-301i(c) (eff. June 13, 2011); D.C.Code Ann. § 2-381.01(10) (eff. Mar. 19, 2013); Haw.Rev. Stat. Ann. § 661-31(c)(2) (eff. July 9, 2012); Ill. Comp. Stat. Ann. ch. 740, § 175/4(e)(4)(B) (eff. July 27, 2010); Mass. Gen. Laws ch. 12, § 5A (eff. July 1, 2012). I note what appears to be the only relevant difference in applying these provisions, one with respect to Relator Hebron, in footnote 6, infra.
. Although the temporal proximity of the “new” fraud alleged and the previously-disclosed fraud does not necessarily bar Rela-tors' claims, it may eventually create difficulty for Relators in demonstrating that any false claims were in fact the fruits of the "new” alleged fraud.
. The Fifth Amended Complaint indicates that advance disclosure to the government may have ceased after the Third Amended Complaint. Fifth Am. Compl. ¶ 5. Although it is not clear that Relators had a continuing duty of advance disclosure after the action was “filed,” Pfizer has not in any event made specific argument as to additional allegations in the Fourth and Fifth Amended complaints it seeks to have excluded.
. That said, for the reasons indicated, the Fifth Amended Complaint fails to allege that
. I apply the amended provisions of § 3729, which generally "apply to conduct on or after” May 20, 2009. Fraud Enforcement and Recovery Act ("FERA”), Pub.L. 111-21, § 4(f), 123 Stat. 1617, 1621 (2009). Because the Relators have limited their allegations to conduct post-dating Pfizer’s August 2009 settlement with the government (by necessity of the public disclosure bar), all relevant conduct in this matter post-dates May 20, 2009.
Once again, however, many states have apparently not amended their false claims statutes to conform to the FCA amendments, or at least had not done so before this action was filed. Compare Conn. Gen.Stat. Ann. § 17b-301b(a)(1)-(3), (7) (eff. Oct. 5, 2009) (conforming to May 2009 FCA amendments), and Col. Rev.Stat. Ann. § 25.5-4-305(l)(a)-(b), (f)-(g) (eff. May 26, 2010) (same), with Del.Code Ann. tit. 6, § 1201(a)(l)-(3), (7) (reflecting pre-amendment language), and Mass. Gen. Laws ch. 12, § 5B(a)(l)-(3), (9) (eff. July 1, 2012) (adopting amended FCA language, but effective after filing of this action).
I note that, unlike most other provisions of § 3729, § 3729(a)(1)(B) reflects substantive changes from its prior incarnation as § 3729(a)(2). Compare 31 U.S.C. § 3729(a)(1)(B) (2009) (imposing liability on any person who "knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent
The relevant provisions of the FERA were specifically designed to overrule the Supreme Court's interpretation of § 3729(a)(2) in Allison Engine, eliminating any intent requirement and affirming the requirement of false claims. Congress also made § 3729(a)(1)(B) retroactive to June 7, 2008, just prior to the date on which Allison Engine was handed down, to prevent any gap in coverage. FERA § 4(f)(1),
I also note that, in contrast to their dispute about the applicable version of the "original source” provision of the FCA, the parties have not argued that the choice of applying the pre- or post-FERA language of § 3729 would affect the disposition of Pfizer’s motion to dismiss.
. Following oral argument on its motion to dismiss, Pfizer brought to my attention a recent decision of the First Circuit in United States ex rel. Ge v. Takeda Pharmaceutical Co.,
. This argument, of course, goes only to Rela-tors' claim under § 3729(a)(1)(A). Under § 3729(a)(1)(B), Pfizer need only have made "fraudulent statement[s] material to a false or fraudulent claim.” I discussed Relators’ allegations of various fraudulent conduct by Pfizer in Part IV.B.3, supra. There, I concluded that those allegations of fraudulent conduct could not usurp the "double falsehood” requirement of § 3729(a)(1)(B); Relators still need to allege and prove "false claims" to which those statements were material. But, Relators’ allegations of fraudulent conduct are sufficiently particular allegations of "fraudulent statements” to satisfy the "first falsehood" of § 3729(a)(1)(B).